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Government yet to fix plans for CGT

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The government has yet to make a decision on the exact nature of proposed increases in capital gains tax.

In a BBC interview, Iain Duncan Smith, the Work and Pensions Secretary, said that the Chancellor has been taking note of the concerns expressed by investors over suggestions that the CGT rate for non-business assets may climb to a point much closer to the higher rates of income tax.

At the moment, CGT has a flat rate of 18 per cent for profits made on the sale of assets.

In his interview, Mr Duncan Smith said: “First of all, none of the levels have been decided. The Chancellor has been clear that he is listening to everything and he will make the final decisions.

“[George Osborne] has also talked about major exemptions for all sorts of different groups, because we don’t want this to harm entrepreneurs, we don’t want to harm families that are heading towards retirement who have actually saved.

“[He] has discussed it with me and others and he is definitely looking for ways in which we can take the sting out of some of this.”

One possibility is the government will introduce some form of tapering that would reduce the amount of tax payable on assets according to the length of time they have been held.